“To connect to people through food.” This is the goal of Sweetgreen, a fast casual chain of restaurants in the United States that serves fresh salads, healthy rice bowls, and teas. What was just a little tavern in Georgetown, Washington D.C. in 2007 has grown to more than a hundred locations in America at present, building a community of like-minded customers who want to live a healthy lifestyle.
How much does it cost to open Sweetgreen? Despite its massive popularity, Sweetgreen does not allow franchising of their business. The company doesn’t have any short-term plans of making this business available to prospective franchisees either.
Don’t feel too disheartened by this though. In this review, I dig into the details of Sweetgreen business, including revenue, facts, and what you can expect when you do end up franchising this salad business. You never know when the company could open for franchising in the future and you want to be ready if it happens. Don’t want to wait? Take our 7-minute quiz to find a franchise opportunity that is available right now.
- Financial Requirements and Fees
- Average Sales / Revenue per Year
- Sweetgreen Franchise Facts
- How Much Does Sweetgreen Make in Profit?
- Advantages of a Sweetgreen Franchise
- Challenges of a Sweetgreen Franchise
- Is the Sweetgreen Franchise Right For You?
Financial Requirements and Fees
Since Sweetgreen does not franchise their business, there is no official record of how much would it cost to open the restaurant. But an estimate would have to probably between $500,000 to $953,000 based on comparable opportunities. The startup cost estimates are based off Salad Works and other salad businesses in the United States. But Sweetgreen could be even more expensive considering the serve a higher end client. Expect royalty fees between 5% to 6% as is a standard in the industry.
Average Sales / Revenue per Year
According to Macro Trends, Sweetgreen’s revenue in 2021 was $340 million. This was an increase from 2020 sales which that came in at $221 million.
Sweetgreen Franchise Facts
|Total Units||Over 150|
|Incorporated Name||Sweetgreen, Inc.|
|Franchising Since||Does Not Allow Franchising|
|Subsector||Food and Beverage|
Sweetgreen was started by three Georgetown University students Nathaniel Ru, Nicolas Jammet, and Jonathan Neman. The three of them expressed the lack of healthy food around the college campus that people actually wanted to eat. The ones that were considered delicious and hip were unhealthy. This prompted the classmates to open Sweetgreen in 2007 shortly after graduation.
The first Sweetgreen location was just a 560 square foot tavern near the university. They sold healthy quick meals and sourced their ingredients directly from local farmers. They were able to draw in a crowd with this type of setup and customers kept coming back for more. The bestseller was the Guacamole Green salad. This continues to be one of the most popular salads on the menu.
After a year and a half, Sweetgreen was able to open two more locations. The business grew and by the end of 2021, they were able to reach 150 locations.
The menu at Sweetgreen consists of salad bowls, warm rice or quinoa bowls. Sweetgreen is known for their farm-to-table setup that in every location around the United States, they have different suppliers because this depends on which local farmer is near them.
Sweetgreen is also committed to helping the environment. Most of the ingredients used are organic. Their packaging is made from compostable. Steelhead trout is sustainably sourced and is offered to replace salmon so they don’t contribute to the over consumption.
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The salad chain does not allow franchising. In a QSR Magazine article back in 2013, one of the founders Nicolas Jammet said that though franchising is a great way to grow, but the founders enjoy growing the company themselves. They also do not want to hand over the control they have with Sweetgreen. In addition, the founders find that sourcing from local farmers is more complex with the franchising model.
With this explanation, you can understand why it’s difficult to obtain information as to how much it costs to open a Sweetgreen near you. Although you can get an estimate as to how much it costs to operate a location based on Sweetgreen’s income statement. The business’s operating costs in 2020 was $229,317,000 and there were roughly 119 locations in that year. So operating costs for a single location would be about $1,927,033.61 based on the performance this year.
Sweetgreen is well-known in Gen Z and Millenial circles and they’re also known by celebrities. Kendall Jenner, Selena Gomez, Katharine McPhee and Malia Obama are just some of the few celebrities that are Sweetgreen’s customers. A number of big names have also invested in this salad chain such as Gwyneth Paltrow, Martha Stewart, Walter Robb, and Danny Meyer. Celebrity chefs such as David Chang, Dan Barber, and Nancy Silverton to name a few have also collaborated with the brand to create special items on the menu.
The three founders of Sweetgreen continue to run the business. Jonathan Neman is reported to own 2.3% of shares in the company worth $350 million. Nathaniel Ru and Nicolas Jammet on the other hand own under 1% of Sweetgreen’s shares valued at $270 million each.
Sweetgreen can be found in California, Colorado, Connecticut, Illinois, Georgia, Massachusetts, New Jersey, New York, Maryland, Pennsylvania, Virginia, Texas, Florida, and the District of Columbia. The company headquarters is located at Los Angeles, California.
How Much Does Sweetgreen Make in Profit?
Sweetgreen’s gross profit in 2021 was reported to be $40 million. This is considered to be an improvement since their profit in the previous year the company lost money. But keep in mind, the company faced a challenging 2020 due to a combination of government lockdowns and a health crisis.
Advantages of a Sweetgreen Franchise
So let’s say you are able to operate a Sweetgreen franchise. What would the advantages be? Here are a few for you to check off.
Sweetgreen advocates for healthy, responsibly sourced, and local ingredients. The company even uses compostable packaging to do their part to minimize waste. But aside from all of those, Sweetgreen goes beyond making sure they build a community that promotes a healthy lifestyle.
The salad chain has a program wherein they visit public schools to educate kids about healthy eating. Every time they open a store, they donate 100% of their proceeds on opening day to a local partner that supports programs in connecting people to food. They’re also all about diversity by hiring a diverse workforce.
These are some of the things you can be proud of if you’re to be a franchise owner with Sweetgreen in the future. If they align with your values, this could be an opportunity you could get behind.
Healthy Delicious Selections
Sweetgreen has a lot of healthy selections on their menu which is to be expected considering it’s what they do. But the salads and rice bowls aren’t your usual kinds. They use kale instead of lettuce which is not just going out of the ordinary but also packs in Vitamin C, potassium and calcium more than lettuce. They use steelhead trout than salmon which is not only rich in omega 3 fatty acids but does not contribute to the overconsumption of salmon. They also have seasonal items on the menu which can get old customers to come back to try something new.
If you get to franchise Sweetgreen then know that you’ll be working with a business that has a lively menu.
Sweetgreen is a popular salad chain where it operates. As mentioned above, they have investors with big names and celebrities that are their customers. They were able to rake in a lot of investors ever since they’ve gone public last year with their shares priced at $28.
This goes to show that this salad chain is not at all the usual or simple one since it manages to attract attention not only from consumers but also restaurant industry experts.
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Sweetgreen is known for their digital service and strong online presence. They have accounts on almost all social media such as Instagram, Twitter, TikTok, Spotify, and Facebook to connect with the Gen Z and Millenial crowd.
The customer relies on their customers to order through their app and even require payments to be made online with cash being an exception just recently. Having a business that’s mostly digital is well-prepared for the future.
Challenges of a Sweetgreen Franchise
Will there be any challenges to face when you franchise Sweetgreen? There sure are. Here’s a few of the challenges you can expect.
According to Indeed, Sweetgreen pays their employees an average of $15 to $16 per hour while a manager makes $17 to $18 an hour. Salary satisfaction is only at 52% with some calling it a fair job while others claim the business has a toxic environment.
If you were to franchise a Sweetgreen, be prepared to have employees bring compensation as a concern if wages do not increase. After all, it’s not uncommon to see other chains like McDonald’s offering $18 per hour plus signing bonuses for employees without any food service experience.
Sweetgreen has been reviewed by many to be expensive. A user Tweeted $13 for a salad was “expensive AF” and reviews found on Google under several locations claim the same thing too. The portions were also said to be small.
Though there were a lot of reasons cited as to why Sweetgreen is expensive such as the locations being in rich neighborhoods with high rents. There are also the growing prices that the economy faces. But a business that advocates in helping people eat healthy should also make their items more affordable.
Digital Isn’t For Everyone
A lot of Sweetgreen’s service is through online. You order through the app and also pay cashless. But there are still some people who don’t know how to use these things, especially old ones who still rely on cash. Though the cashless transactions have been lifted, it would be nice if this option will be here to stay for a while.
Is the Sweetgreen Franchise Right For You?
If you love the things that Sweetgreen is doing to the community and also believe in their mission and goals regarding healthy living and helping out local farmers, then this business opportunity could be right for you. There’s just the problem of Sweetgreen not a franchise opportunity at this time.
What is an alternative Sweetgreen franchise?
In the meantime, if you’re already geared up in franchising a salad restaurant right away, check out Salad Works. They’ve been in the business of selling salads since 1986. They offer customizable salads, wraps, and sandwiches. The best part is that they’re open for franchising too.
To franchise Salad Works, expect the investment range to be around $234,000 to $653,000. The franchise fee is $35,000. Salad Works also requires liquid assets of $125,000 and a net worth of $350,000.
Healthy eating and a healthy lifestyle continue to be a trend that’s not going away anytime soon. So if you get on the healthy train, know that you’re pouncing on a concept with numerous tailwinds. I only hope Sweetgreen will make franchising available soon so you can capitalize on this exciting concept.